Is a fixed or variable outsourced IT contract better for your business?

variable outsourced IT contract

The traditional outsourced IT model is the fixed service contract. With it you pay a set fee for a set period, the exact number of devices and receive a suite of IT services and regular reporting. Yet, for many businesses, this outsourced IT model is not adaptable, for example, if the number of end point devices were to change or a request for additional support was made that was not deemed to be within scope of the contract, the business could find themselves being charged additional costs. With the ever-changing IT landscape, businesses need the elasticity to be able to easily adapt services within the contract.

The issues with fixed IT contracts

While the fixed model will work well for some organisations, there are issues that can arise for others. With the contractual assurance of a monthly fee over a period of a year or longer, there is the risk that your outsourced IT provider may become a little complacent as time goes on. Businesses could find their service level falling over the term, with the bare minimum undertaken to cover the contract.

The very nature of a fixed service contact means they are typically reactive, not proactive and there is often a lack of adaptability in, what has become, a fast-moving IT landscape and an uncertain economy. Many businesses may find that part way through the year they need to reduce their IT spend or, conversely, that their business growth is no longer being met by their current IT solution.

It is in these situations that a variable, rolling IT service contract has the edge.

The benefits of a variable IT contract

There are a number of ways in which a variable contract can benefit businesses today. In our experience, it enables the outsourced IT firm to move with their client and their budget. Services can be tailored to the business’s particular needs at that time and adapted alongside the business as it changes.

Service standards also tend to be more focused and connected through regular check-ins with the business to understand their ongoing needs and provide cost-effective, tailored solutions.

A variable IT service contract does not mean you will be left high and dry after only a short period. Rather, you can block book the estimated time required for the next quarter. The hours are then tracked and if there is time left over it can be banked for specific project work or services. Most of all, it means you can scale your service requirements over a much shorter period, or be rolled forward into future periods; allowing for clearer budgeting and cost management.

You may also be interested in: 5 reasons to choose an outsourced managed IT service

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Using an IT audit to govern your IT service contract

An IT audit is often the first step to working with a business in the long-term, and there’s good reason. Firstly, the audit can identify any remedial work that if undertaken at the start, can often reduce your monthly service contract costs. This is certainly a feature that does not exist in fixed price contracts.

Equally, conducting a thorough audit will allow any weaknesses in your business’s infrastructure to be prioritised and fixed by urgency. This allows your business to breakdown any works that need undertaking into more manageable and less costly projects that can be spread out and included in your variable service contract. Once completed, your contract can be revised into an ongoing service that suits your business.

Find out more

If you would like to speak to us about the tailored IT services we can offer your organisation, please contact Andrew Wayman at or call our office on +44 (0)1344 870062.